Gold prices ended February 8.3 per cent higher for the year so far, but private investor demand for the yellow metal eased from its strongest January in five years.
The number of gold buyers on BullionVault, a leading online platform, fell by a fifth in February to the lowest level in just over a year. The number of sellers rose almost a third as some exisitng owners took profits, BullionVault said.
This pushed the firm's gold investor index, a unique measure of private investor sentiment towards gold, down from 54.3 to 51.8. That's its lowest reading since July 2016, when users took advantage of Brexit fears to sell the safe haven asset at its highest prices in two years.
Any reading below 50.0 suggests more sellers than buyers.
The gold investor index hit a five-year high of 59.3 in November after Donald Trump's shock victory in the US election.
"That offers longer-term investors the chance to buy bullion at a discount to the recent highs.
"While sudden price spikes might see active traders take profits, we expect the underlying return of steady precious metals investment to hold firm in 2017."
The price of gold has slumped today. It was down 0.64 per cent at $1,217.60 per ounce in afternoon trading.
Craig Erlam, analyst at Oanda, said: "[The US dollar's] strength has finally taken its toll on gold – perhaps assisted by the slightly improved political situation in France and the Netherlands ahead of the elections there – and the yellow metal is looking vulnerable to a possible break below $1,220, which could trigger another move back towards $1,200 or $1,180."